Chapter 12 Notes v2.docx

4 Pages

Business Administration
Course Code
BUS 100
Kim Milnes

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Chapter 12 – Understanding Marketing Processes and Consumer Behaviour What is Marketing? 1) Marketing = planning and executing the development, pricing, promotion, and distribution of ideas, good/services to satisfy both buyers and sellers a) Marketing concept = idea that the whole firm is directed toward serving customers at a profit  (achieving corporate objectives by understanding customer needs and costs of satisfying them, and providing product that best satisfy those needs) 2) Providing Value and Satisfaction a) Value = relative comparison of product’s benefits vs. costs  Benefits include features, but also emotional satisfaction  Costs is price, time, emotional decision b) Utility = ability of a product to satisfy a need 3) Goods, Services, and Ideas a) Consumer goods = products purchased by individuals for personal use b) Industrial goods = products purchases by companies to use directly/indirectly to produce other products c) Services = intangible products (time, expertise…) d) Marketing also promotes ideas 4) Relationship Marketing a) Relationship marketing = a type of marketing that emphasized lasting relationships with customers/suppliers b) It is much cheaper to keep a customer, rather than finding new customers Strategy: The Marketing Mix 1) Marketing managers = managers responsible for planning/implementing all the marketing mix activities a) Culminate in marketing plan – detailed strategy for gearing the marketing mix to meet consumer needs/wants 2) The “Four P’s” of Marketing a) Product, Pricing, Promotion, Place b) Mirror of the buyer’s “four C’s”  Customer solution, Customer cost, Customer convenience, Customer communication c) Product  A good, service, idea that satisfies buyer’s needs and demands  Product differentiation = creation of a product or product image that differs enough from existing products to attract customers d) Price  Part of marketing mix of choosing appropriate price to meet profit objectives  Prices must support manufacturing/admin/research, etc…but must be “buyable” e) Place  Aka distribution = part of marketing mix concerned with getting products from producer to buyer….including physical transportation and sales outlets 1  Aka though which channels a product moves from manufacture  consumer f) Promotion  Part of marketing mix concerned with selection appropiat4e techniques for enticing customer to buy product Target Marketing and Market Segmentation 1) Cannot be everything for everyone a) Target market = group of people who have similar wants/needs, and may be expected to show interest in same products b) Market segmentation = diving market into categories according to traits customers have in common c) Positioning = process of fixing, adapting and communicating the product to specific segments 2) Identifying Market Segments a) Geographic Variables  Geographical units that may be considered in segmentation strategy b) Demographic Variables  Characteristics of populations that may be considered in segmentation strategy  Age, education, family, income, nationality, race, religion, sex, language, etc…  Multicultural marketing = activities directed art various identifiable ethic groups c) Psychographic Variables  Psychological traits that a group has in common, inc. motives, attitudes, activities, interests and opinions  Psychographics are important, for (unlike geo-/demo- graphic) they can be changed with marketing d) Product-Use Variables  How people use the product and what brand loyalty there is  Product positioning = establishment of an easily identifiable image of product in consumers’ minds 3) Market Segmentation: A Caution a) Difficult to always group people, despite –graphic variables  Uni. Profs earn same $$ as truck drivers, but spending is very different b) System of values plays major role in whether adopting new product 4) Targeting Strategy a) Undifferentiated marketing  Appeals to broad spectrum of people (eg. Razor blades) b) Differentiated marketing
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